Best place for a small amount of savings for easy access.

Pensioner2b

Hi
I have a small amount of savings that I want to keep handy but in an account that is paying more than the paltry 1.15% I am getting from my bank. For clarity, ISA's allowance for both of us are filled for this year. Currently have other savings in place, hubby is a 40% tax payer so only has savings that will qualify for up to £500 interest. The rest is in my name which I will pay 20% tax on until the new tax year when my allowance will increase due to my pension being less than £12k. So what I am not particularly looking for is an account where the money is locked away e.g. I might withdraw some to pay for a couple of upcoming holidays etc. I would probably only keep in the region of £10k in this account. Or is it just not worth moving it for that account and keep it handy in my bank account.

friolento

Your most comprehensive list of savings accounts: 
 https://moneyfactscompare.co.uk/savings-accounts/

refluxer

With the best easy access accounts currently paying around 4.5%, your £10k will get around £450 in one of the those compared with £115 for leaving it where it is, so it would be well-worth switching.

If you check out the best easy access accounts on Moneyfactscompare (as suggested above), the savings accounts I would go for would be Chase (if you don't already have a Chase account, don't mind also having to open their current account and are happy with app-only banking) or Cahoot (who are part of Santander). Cahoot are essentially online only (banking via a web browser) but you can apparently use the Santander banking app (with limited functionality) if you don't already use it for Santander.

While Cahoot are currently paying a slight lower rate than Chase, their terms state that they have to give 2 months notice of a rate reduction so this account could end up paying more than Chase for a while if there's a rate reduction next month. Banking with Cahoot will also give you access to their Sunny Day Saver, which pays 5% on balances up to £3k. You may also be able to get cashback with TopCashback for opening those Cahoot accounts (see this thread).

In terms of accessibility - once either of those are set up, if you want access to your savings then transfers to and from your current account are instant with online banking (I've used both Chase and Cahoot).

BooJewels

Another tick in the plus column for Cahoot is that you can set up multiple payees to move money to - many savings accounts only allow you to withdraw to a single nominated current account (sometimes a couple), which might be restrictive,  depending on your needs.

Pensioner2b

Thank you, I will take a look, am not sure about Chase though purely because I am not sure I want to set up a current account. Just a savings account will suffice for me.

BooJewels

I've just remembered a point I'd meant to make in my earlier post  I think you'd already covered it in your OP - but it's worth mentioning anyway - might benefit someone reading. 

You said about keeping funds in your bank account - you also mentioned interest too - so I suspect you're keeping the funds in a bank savings account.  But just in case you're not - don't keep substantial funds in current accounts.  Apart from missing out on interest, if someone compromises your account or steals your card, they can go on a spending spree with your hard earned pennies. I only keep what is immediately needed in the current account and modest funds to top it up in a connected bank savings account - which I can transfer in moments if needed.  If someone steals my card, they'll be very disappointed.

It gives me the willies when someone on TV talks about a scam that emptied their bank account and got tens of thousands - it's wrong for so many reasons. 

allegro120

Pensioner2b said:

Thank you, I will take a look, am not sure about Chase though purely because I am not sure I want to set up a current account. Just a savings account will suffice for me.

Cahoot could be a good choice for you. No need for opening current account, transactions are instant and the rate is good.

easyasonetwothree

Another vote for cahoot due to good interest rate and quick transactions. However they don't have an app and their website is a little clunky, but it's fine for occasional transfers!

wmb194

easyasonetwothree said:

Another vote for cahoot due to good interest rate and quick transactions. However they don't have an app and their website is a little clunky, but it's fine for occasional transfers!

You can use Cahoot with the Santander app, you just enter your Cahoot login details.

Pensioner2b

BooJewels said:

I've just remembered a point I'd meant to make in my earlier post  I think you'd already covered it in your OP - but it's worth mentioning anyway - might benefit someone reading. 

You said about keeping funds in your bank account - you also mentioned interest too - so I suspect you're keeping the funds in a bank savings account.  But just in case you're not - don't keep substantial funds in current accounts.  Apart from missing out on interest, if someone compromises your account or steals your card, they can go on a spending spree with your hard earned pennies. I only keep what is immediately needed in the current account and modest funds to top it up in a connected bank savings account - which I can transfer in moments if needed.  If someone steals my card, they'll be very disappointed.

It gives me the willies when someone on TV talks about a scam that emptied their bank account and got tens of thousands - it's wrong for so many reasons. 

But could not the same happen with your savings accounts? And if they did, would the funds not be covered under the FSC.  However, I will be looking to move the small amount of savings I have in my bank saving account. 

refluxer

Pensioner2b said:

But could not the same happen with your savings accounts? And if they did, would the funds not be covered under the FSC.  However, I will be looking to move the small amount of savings I have in my bank saving account. 

Unlike current accounts, savings accounts won't typically have a debit card associated with them and therefore you can't use them to make purchases directly, so they'll be less at risk of fraud than a current account.

Many savings accounts also require you to have a nominated account (ie, your current account) for both deposits and withdrawals which means that, for those accounts, a fraudster would need access to both accounts in order to get access to any money in your savings account. Even savings accounts that allow payments to and from any external account would normally have security in place to make it harder for a criminal to set up a new payee (eg.. confirmation required via your phone when first setting one up).

The FSCS covers you for up to £85k (soon to be £120k) if the bank or building society fails - it's the bank themselves who'd potentially be liable if you were defrauded, but presumably only in genuine cases when you weren't negligent with your security.